Santa's beginning to notice real differences in naughty v. nice in today's markets

There were real differences in the market today as Santa seems to be assigning a lump of coal to the banks - naughty - and gains to midsize businesses, the Russell 2000 (up over 1% today) and Nasdaq (up 0.5 to 0.6% today). Financials didn't fare well either. But we may have the beginnings of a bounce in the euro, yen, and gold, which if it catches, could help fuel more movement as we close out 2009 and get into 2010. Maybe it's just a short-squeeze on those trading ETFs (TZA, etc.,) really pushing up the RUT and NDX compared with the more anemic Dow, SPX and NYSE. But all in all, today's morning lows held, and if that continues to be the case then we may see some more enthusiasm in the equities indices.

For that, it may be sufficient if the banks can hold up a bit longer. It's almost a Fibonacci 144 that failed this year, and we're expecting this index to head lower. When that happens it could throw cold water on the general rally. But perhaps that will get postponed for a few weeks!

Speaking of naughty v. nice, check out Tony Caldaro's Wednesday update at http://caldaroew.spaces.live.com/blog/cns!D2CB8C5EBA2ADE86!64452.entry. While equities pushed closer to upside targets, there's negative divergence on many as you can see in Tony's charts, and he points out some reasons to remain skeptical about the fundamentals:

After monday's gap up the SPX continues to work its way higher on light volume. Today's push higher, into the SPX 1120's, appears to have cleared the quite resilient 1107 OEW pivot. Next objective should be the 1133 pivot. Yesterday's second revision to the Q3 GDP to +2.2% from the original +3.5% projection continues to be reported as proof of an economic recovery. However, when one views government GDP figures from 1948 graphically, (courtesy of Shadow Stats), there are no real signs of a recovery yet. Happy holidays, and best to your trading!

MEDIUM TERM: uptrend makes new high at SPX 1122

LONG TERM: bear market rally

CHARTS:http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

If you're not already familiar with ShadowStats.com/, here's an example of the kind of data they provide:

The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLSestimate of U-6 unemployment, which includes short-term discouraged workers.

For that matter - Here's a peek at something else Shadow Stats is showing about the Monetary base; and a link to their free 5/29/09 Update that gives details on various aspects of the monetary system:
• Employment and Unemployment Not Improving, Despite Distortions from Seasonal Factors and Revisions • Unemployment Rate U.3 at 10.0% (SGS 21.8%) • Fed Boosts Monetary Base Anew More ...

http://www.shadowstats.com/article/flash-update-2009-05-29